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Maruti Net Profit falls

By Motortrend India Staff   |   29 October,2008

The Indian car major Maruti Suzuki has experienced a dip in its net profit from 36.5% to Rs 296.1 crore in September 2008 against Rs 466.5 crore in the corresponding period of the previous fiscal. The reason affecting the profit is said to be the increase in material costs, augment depreciation and royalty payments.

The company’s profit margins were hit and were dropped to 12.3% in the September quarter against 17.3% last year. During the same period, the total sales volume saw a dip of 2.5% to 1.71 lakh units from 1.76 lakh units previous year. However, the exports in the same period saw a marginal raise of 17,745 units against 15,171 units last year.

The company is undergoing a tough phase due to severe macro economic pressures like lack of credit availability, high interest rates and depressed consumer sentiments that has affected both profitability and sales.

The cost of raw material was boosted to Rs 3,578 crore as against Rs 3,316 crore in the same quarter of the previous year. But all this has not affected the company’s expansion plans and it will continue to invest the already announced Rs 9,000 crore in its various plants — engine plant, capacity expansion, and R&D centre. The company is all set to launch its global car ‘A-Star’ by November this year.

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